Bessent addresses French bond turmoil

U.S. Treasury Secretary Scott Bessent publicly addressed French bond market turmoil for the first time on October 20.

“I don't expect what's happening in France to spill over”

Spillover risk contained

Bessent states spillover risk to U.S. markets is contained while confirming safe-haven capital flows into U.S. Treasuries.

“We are indeed seeing money flow out of some countries of concern and into US Treasuries seeking a safe haven”

10-year Treasury yield falls

The benchmark 10-year U.S. Treasury yield fell about 20 basis points from early-October high.

France-Germany spread widens

The France-Germany 10-year government bond spread widened to 159 basis points in October.

French 10-year yield rises

French 10-year government bond yield rose to 4.963%, highest since 2002.

French sovereign credit reprice

Market pricing of French sovereign credit has undergone structural change with covered bonds yielding 30 basis points lower than government bonds.

Japanese investors sell French bonds

Japanese investors have net sold about ¥356 billion (approximately $2.3 billion) of French government bonds this year.

Bessent on mortgage rates

Bessent says U.S. mortgage rates should decline as energy price shock fades and borrowing costs remain above 7%.

Fannie Mae and Freddie Mac

U.S. government considering ending conservatorship of Fannie Mae and Freddie Mac within next year or two.

Bessent on political stability

Bessent praised France's economic team as 'first-rate' despite political deadlock and budget concerns.

“the economic team of President Emmanuel Macron is 'first-rate'”

Market reaction to France

Italian 10-year government bond yield rose 11 basis points to 4.58% as markets reassess euro-area credit risk.

Bessent on housing legislation

Housing legislation passed by Congress restricts institutional investors' access to parts of residential market.